If you could make a lot of bourbon whiskey these days, you could be distilling real profits. Bourbon sales in this country are up 36 percent in the past five years.

But you'd need new wooden barrels for aging your new pristine product. Simple white oak barrels, charred on the inside to increase flavor and add color, are becoming more precious than the bourbon.

Making these barrels is a very old craft, almost an art, called cooperage. The Scots-Irish who settled in Appalachia could do this: Cut the white oak boards into staves, steam them to bend, make metal hoops to hold the barrel tight.

You can see this process is the small town of Lebanon, Ky. This cooperage is one of several owned by a company called Independent Stave, which is based in Missouri and is the largest maker of whiskey barrels in the world.

As the barrels take shape they are carried, rolled, and conveyed — sometimes overhead — to the different work stations. Starting out as a collection of oak staves, they are fitted together, steamed, bound with steel and seared with flame before arriving at the end ready for inspection.

"The barrel has water and air in it," says Leo Smith, the supervisor for the last stop on the production line. "They're looking for any kind of leak or defect in the barrel. ... He's gonna put a plug in that barrel where it's leaking, a small plug in it, and stop that leak."

The plug is a simple piece of cedar, whittled by hand.

Independent Stave is a family-owned company and they don't talk much about how many people work there or how many barrels they make. But plant manager Barry Shewmaker does say that production has doubled in the past two years.

"We're seen an increase, and it looks like it's ... there's no end in sight," Shewmaker says.

Independent Stave makes barrels for the big distilleries — Kentucky brand names you might have tasted — and so far Independent is staying steady with demand.

But there's another need for oak barrels: very small craft distilleries starting to make bourbon, vodka, gin or rum. Their output is low — sort of like a drop compared to the big brands — but someone does have to make the barrels.

Kevin and Paul McLaughlin moved to Louisville from Scotland and are joint presidents of Kelvin Cooperage here. For more than 20 years they've been crafting wine barrels, and they buy used bourbon barrels to fix up and sell to the whiskey trade in Scotland and Ireland.

"Once we have the toast layer we'll let the barrel ignite," says Paul McLaughlin of Kelvin Cooperage in Louisville, Ky.

But now a different market has come right to them: They're making white oak barrels for the new craft distillers. Paul McLaughlin demonstrates the charring process — they put oak scraps in the finished barrel — and soon the flames are visibile. In the beginning it's called "toast."

"We start smelling kind of a baked bread — that smell, that's what we like, that's when we know we're getting a toast layer, and once we have the toast layer we'll let the barrel ignite, like that" says Paul McLaughlin. "You get baked bread, you get kind of a marzipan — really, really nice smell."

There may be as many as 700 small craft distillers in the U.S. today, and that number is going up fast.

"Some of them call and say 'I'm making whiskey, I've got my stills going and I need barrels, and I didn't think there would ever be a problem getting barrels,' " Kevin McLaughlin says.

At the Kelvin Cooperage in Louisville they are working overtime, but there's so much demand that the company estimates they could sell all the barrels they could make next year, 10 times over.

Transcript

LOURDES GARCIA-NAVARRO, HOST:

If you make a lot of bourbon whiskey, you could distill a lot of profit. That's because bourbon sales in the U.S. are booming, up 36 percent in the last five years. But to age your new, pristine product, you need new wooden barrels. As NPR's Noah Adams reports from Kentucky, these barrels are becoming more precious than the bourbon.

NOAH ADAMS, BYLINE: It's a very old craft, a skill, almost an art. It's called cooperage. The Scots-Irish, who settled in Appalachia could do this. Cut the white oak boards into staves, steam them to bend, make metal hoops to hold the barrel tight. And coopering is now an industry. The barrels are made in factories. Inside, the air smells of fresh cut wood, and you can almost see the sounds.

(SOUNDBITE OF COOPERAGE FACTORY)

ADAMS: This cooperage is one of several owned by a company called Independent Stave. It's based in Missouri and it's the largest maker of whiskey barrels in the world. We've come to see the process in the small town of Lebanon, Kentucky.

(SOUNDBITE OF COOPERAGE FACTORY)

ADAMS: As the barrels take shape, they are carried, rolled, and conveyed, sometimes overhead, to the different workstations. Starting out as a collection of oak staves, they are fitted together, steamed, downed with steel, seared with flame. The barrels arrive at the end ready for inspection.

LEO SMITH: The barrel has water and air in it. They're looking for any kind of leak or defect in the barrel. He's going to fix that barrel. And if it's leaking, he's going to put a plug in that barrel where it's leaking - a small plug in it - to stop that week.

ADAMS: The plug is a simple piece of cedar widdled by hand. We're talking with Leo Smith. He is the supervisor for the last stop on the production line.

SMITH: Got to let the air and water out. Drain the water. Then it goes to this gentleman down here for another final inspect. And they go onto the trailers to distilleries.

ADAMS: Independent Stave is a family-owned company, and they don't talk much. I can't ask how many people work here in Kentucky, how many barrels they make. But the plant manager, Barry Shoemaker, does say in the last two years production has doubled.

BARRY SHEWMAKER: There's two shift a day, six o'clock in the morning till three in the afternoon. And at night we start at eight o'clock and we work until 4:30 in the morning. We've seen an increase, and it looks like there's no end in sight.

ADAMS: This company, Independent Stave, makes barrels for the big distilleries, Kentucky brand names you might have tasted. And so far, Independent is staying steady with demand.

But there's another need for oak barrels. If you're very small company starting to make bourbon or vodka, gin, rum, yours is called a craft distillery. Your output is low. It's kind of like a drop compared to the big brands. But somebody does have to make you some barrels.

KEVIN MCLAUGHLIN: My name is Kevin McLoughlin. I'm joint president of Calvin Cooperage.

PAUL MCLAUGHLIN: And I'm Paul McLoughlin, also joint president of Calvin Cooperage.

K. MCLAUGHLIN: Were both interchangeable.

P. MCLAUGHLIN: We're a team.

ADAMS: This is Kevin and Paul McLoughlin. The brothers moved here from Scotland. They own the Calvin Cooperage in Louisville. For more than 20 years, they've been crafting wine barrels and buying used bourbon barrels to fix up and sell to the whiskey trade in Scotland and Ireland. But now that this different market has come right to them, they're making white oak barrels for the newly rising craft distillers. Paul P. McLouhlin takes me to watch the charring process. They put oak scraps in the finished barrel, and soon you'll see the flames. In the beginning, it's called toast, and you'll be sniffing the char.

P. MCLAUGHLIN: You start smelling kind of a baked bread. See that smell? That's what we like. That's what we know we're getting a toast layer. And once we have the toast layer, we'll let the barrel ignite like that. You get your baked bread. You get kind of a marzipan, really, really nice smell.

ADAMS: The number of small craft distillers in the U.S. - it's going up fast. There could be 700 out there.

P. MCLAUGHLIN: Some of them call and say I'm making whiskey, I've got my stills going, and I need barrels. And I didn't think there would ever be a problem getting barrels.

ADAMS: At the Calvin Cooperage in Louisville, they are working overtime. But the company estimates that in this year to come, they could sell all the barrels they could make ten times over. Noah Adams, NPR News. Transcript provided by NPR, Copyright NPR.